Pakistan - Imported Scrap Trades Silent; Domestic Steel Prices Up on Short Supply

Pakistan imported scrap trades have remained silent for a couple of weeks now, with no major bookings being reported for quite some time. Even as global offers have been inching down for last 2 weeks on low demand, decent inventories from previous bookings and low demand due to most mills being either closed or at minimum production level, has kept buyers disinterested for making fresh bookings since April last week.

Assessment for Shredded 211 scrap stands at USD 265/MT CFR, down from USD 270/MT last week, with the few offers that are available currently, being around this level. Prices have come down by USD 11-12/MT against bookings in 3^rd week of April.

Market participants are expecting that mills may become operational from 11^th May onwards, after govt announces softening of lockdown on 9^th May, later this week. Presently, only KPK province mills are exempted from lock down, while it was also heard that few mills in Punjab are gradually operationalizing this week.

Due to mills being closed leading to shortage of steel supply, as the construction sector has been reopened to some extent, the prices of finished steel have rallied up, as Steel bars (G60) are being offered at prices as high as PKR 118,000-122,000/MT ex plant depending on region.

Bala Billet and CC Billet offers have climbed up to PKR 92,000/MT and PKR 98,000/MT respectively, while local scrap eq to shredded is being quoted at PKR 68,000 Ex plant basis.

Once the market opens fully in the coming weeks, and demand-supply balance is somewhat restored, prices are widely expected to come down again.